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Balaiah (Others)     21 June 2010

Penalty on Outstanding Taxes


Dear Sirs,


For Individuals: 


1) The 1% monthly penalty for outstanding taxes payable is calculated as per simple interest or compound interest basis?


2) The number of months is calculated from the end of July or March?


Please let me know.



 7 Replies

Rahul Gupta

Rahul Gupta (Project Controller ACA MBA(Fin.))     21 June 2010

My view is that it is Simple Interest and the penalty will be levied from March.

Rahi Naik

Rahi Naik (student)     21 June 2010

agree with case of penalty only march while in case of interest that must be last due date of filling return 


SIVASIVA (FCA, Future CA)     21 June 2010


Giridharan K

Giridharan K (Student)     21 June 2010

First of all I divide your question into three sections Viz. 234A, B & C.

234A Starts from August for Individuals

234B starts from April 

234C Tax*30*3%+tax*60*3%+tax*1% (Assuming that no advance tax has been paid, if the respective percentages were paid, that part alone can be ignored).

With Regards

Giridharan K


manish (Article Assitant)     22 June 2010


interest is 3 types 
1. 234A
2. 234B
3. 234C
1. For 234A it's start when you are unable to file the return on or before date then this interest levied.
2. For 234B it's start from April of A.Y
3. For 234C Start from the end of these days of 15-6,15-9,15-12,15-3 P.y 


NARENDER PAWAR (CA final Student)     22 June 2010

mr. manish is right
Giridharan K

Giridharan K (Student)     22 June 2010

Since this is the hot period of filing returns of indvidual, I construed outstanding taxes as non compliance of payment of advance tax and interest thereon which comes U/s 234B & C.  I consider theses 3 sections as brothers and hence i gave formulas for all the three. 

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